Monday, July 21, 2008

Listen to the Market

Today's ES theme? Listen to the market.

It's 3:27pm and neither I nor the market had any conviction today. And if the market runs 20 points in the next 30 minutes, I could care less. Tomorrow will be here soon enough and there's typically too much risk of eroding capital in the last hour [been there, done that] . Did a decent job of keeping the powder dry today, and the best pace and entries actually came during Europe's session before most of the U.S. was awake. Take a look at the DAX, or even ES before the 9:30am open and you'll see the breakouts.

And speaking of listening:

Don't listen to chatroom snake-oil salesmen and horse race callers. The charts have the only voice that matters.

Don't listen to analysts trying to explain "why" a market moved or didn't. The "why" doesn't matter. The fact that buyers or sellers (or neither as was the case today) were stronger does. I'll leave mind-reading to others more qualified.

Don't listen to your trading buddies for confirmation. If you're lacking confidence or conviction, don't trade until you have or rediscover it.

Don't listen to that devilish inner voice tempting you to force trades just to try to make some silly "daily average". That would be like trying to win something from every poker hand, including 2-7 unsuited. Let the average be an interesting but completely irrelevant after-the-fact math exercise. Don't try to create it.

Don't listen to this blog if you're looking for a "how-to". If certain concepts sink in and seem relevant, great as it's cost me plenty in learning capital. However, we're individual artists with our own canvases. How you paint the portrait or whether you choose to pick up the brush at all are both deeply personal decisions.

Looking forward to better opportunities on Tuesday.


nocved said...

Hi Don

Couldn't agree more with your post. Learning to listen is important in all phases of one's life not to mention trading. Your post reminds me of a quote from the book "The Listening Book Discovering You Own Music".

"It was a great day when I discovered that there is more in the air than I had ever heard before, or ever could hear. I remember the amazement in realizing the more you listen the more you hear, the delight in registering sounds that had always been present but I had never heard, the ecstasy of knowing this is a lifelong experience and infinitely expandable"


Don Miller said...

Good stuff Tom.

Perhaps the more one listens, the more humble one becomes. And in this business, humility seems to breed success.